Electronic funds transfer method

ABSTRACT

A method of conducting an online transaction, said method including the steps of providing a transaction manager, registering a user with the transaction manager, registering a merchant with the transaction manager, the user requesting a unique transaction identifier from the transaction manager to cover the purchase, the transaction manager providing the user with a unique transaction identification, the user requesting the merchant for a transaction to purchase a product or service, the user providing the transaction identification to the merchant, the merchant providing the transaction identification to the transaction manager, the transaction manager validating the transaction identification, the transaction manager providing the merchant with a unique transaction number if the transaction identification is valid, and the transaction manager depositing payment into the merchant&#39;s financial institution account.

The present application is a 35 U.S.C. §371 national phase applicationfrom, and claims priority to, international application PCT/AU01/00137,filed Feb. 14, 2001 (published under PCT Article 21(2) in English),which claims priority to Australian patent application Serial No.PQ5566, filed Feb. 14, 2000 and now lapsed, which applications areincorporated herein in their entirety by reference.

FIELD OF THE INVENTION

The present invention relates an electronic funds transfer method forconducting an online purchase and a payment process.

BACKGROUND OF THE INVENTION

The present e-commerce environment and systems do not give people theconfidence in shopping online. Consumers are concerned about securityissues when using their credit cards/debit cards to make purchases. Theyare worried that by using their credit cards/debit cards to makepurchases online, that it will compromise the security of their creditcards/debit cards and they will be vulnerable to fraud. Should creditcard information go into the wrong hands, credit card owners may beliable for transactions not conducted by them.

The present invention provides a process that adds security to thetransaction to alleviate some of the risks involved.

SUMMARY OF THE PRESENT INVENTION

In accordance with the present invention there is provided a method ofconducting an online transaction, said method including the steps of

-   -   providing a transaction manager;    -   registering a user with the transaction manager;    -   registering a merchant with the transaction manager;    -   the user requesting a unique transaction identifier from the        transaction manager to cover the purchase;    -   the transaction manager checking the validity of the user;    -   the transaction manager providing the user with a unique        transaction identification if the user is valid;    -   the user requesting the merchant for a transaction to purchase a        product or service;    -   the user providing the transaction identification to the        merchant;    -   the merchant providing the transaction identification to the        transaction manager;    -   the transaction manager validating the transaction        identification;    -   the transaction manager providing the merchant with a unique        transaction number if the transaction identification is valid;        and    -   the transaction manager depositing payment into the merchant's        financial institution account.

Preferably the transaction manager deducts money from a user's accountto cover the money paid to the merchant. Preferably the transactionmanager deducts money at the time of the request of the uniquetransaction identifier. Alternatively the transaction manager deductsmoney at the time of the transfer of money to the merchant.

Preferably the user's account is with a financial institution.Alternatively the user's account is with the transaction manger, theaccount may be a credit account or a charge account. Preferably thetransaction manager issues a new account that corresponds to an existingaccount with a financial institution, whereby the new account detailsare used by the user and merchant in place old the existing accountdetails. Preferably the transaction manager uses the new account detailsto look up the existing account details and the existing account detailsare used by the transaction manager with the financial institution.

Preferably the user requests the unique transaction identifier by anInternet connection. Preferably the user's registration details arestored in a database of the transaction manager. Preferably themerchant's registration details are stored in the database including aunique merchant identification.

Preferably the user's request for the unique transaction identifier isvalidated by checking the user's details stored in the database of thetransaction manager. Preferably when the merchant forwards the uniqueidentification number to the transfer manager, the merchants uniqueidentifier is sent to the transaction manager, whereby validating themerchants identification is checked by the transaction manager beforesending the identification number.

Preferably the transaction manager checks if sufficient funds areavailable to cover the transaction and the transaction number is onlyprovided to the merchant if sufficient funds are available.

Preferably the merchant links to the transaction manager by the Internetor a dedicated secure line to request the transaction number and thetransfer of funds. Preferably the link between the user and thetransaction manager and merchant and transaction manager are secured byencryption.

DETAILED DESCRIPTION OF THE INVENTION

In order to provide a better understanding a preferred embodiment of thepresent invention will now be described in detail, by way of exampleonly, with reference to the accompanying drawings, in which:

FIG. 1 is a diagrammatic view of the relationship between entities usingthe method of the present invention;

FIG. 2 is a diagrammatic flow chart representing a transaction processin accordance with the present invention;

FIG. 3 is a block diagram of a system architecture of the transactionmanager of the present invention;

FIG. 4 is a block diagram of a database structure of the transactionmanager; and

FIG. 5 is a block diagram of a data validation process conducted by thetransaction manager.

Referring to FIG. 1, entities using the method of the present inventionare shown. A transaction manger 2 is provided. The transaction manageris referred to as ZIPFUND in the drawings. A user 4 uses the method ofthe present invention to conduct an electronic fund transfertransaction. Each user must have an account with the transaction managerto use the facility. The account is specific to each registered user.Information held by the transaction manager in relation to each user isheld in confidence and in compliance with privacy laws. A user maymaintain an Internet financial account with the transaction manager. Thetransaction manager will have the discretion to issue financial accountsto approved clients.

An e-commerce merchant 3 is a person or entity that uses an Internetsite to do business with Internet clients. E-commerce merchants mayregister with the transaction manager to use the facility provided bythe present invention. The registration process ensures that thee-commerce merchant site is a secure site and Internet clients are awareof this certification by the transaction manager. E-commerce merchantsare required to obtain the transaction manager transaction identifiersfrom Internet clients prior to confirming payments. The transactionidentifier needs to be confirmed by the transaction manager in order tosecure payment from financial institution. The transaction manager willmaintain a database of registered e-commerce merchants.

A financial institution, such as a bank 1, provides an approved level offunds that an Internet user has available. This may be, for example, acharge account or a credit card.

Each e-commerce merchant requires an account with a financialinstitution in order to receive payments. The transaction manager isresponsible for all payments of transaction to a nominated financialinstitution of the e-commerce merchant.

Each financial institution may provide to the fund transfer manageraccess to a clients financial information including approved fundsavailability. This will enable the funds transfer manager to confirm anInternet user's financial standing. A financial account is issued to acustomer on the basis of an understanding between the transfer managerand a financial institution.

The transfer manager is a trusted intermediatory that provides theservices between Internet users, e-commerce merchants and financialinstitutions. In particular, the transaction manager is intermediatorythat a user can trust to interact between the merchant and an electronicfunds transfer system of a financial institution. The transfer managerprovides e-commerce merchants with an approved transaction number inresponse to a transaction identifier sent to them via a secure network.The transfer manager provides to the financial institution an approvedtransaction number for each of the transaction identifiers sent by ane-commerce merchant via a secure network. Preferably the transactionmanager uses a newly generated account number to replace the originalcredit card number and/or debit card number account for accounttransaction processing. This adds another level of security to theprocess.

The transfer manager is responsible for the security for Internet userscarrying out their business to consumer transaction. This is possiblethrough the use of proprietary software, accounting systems, designmethodology, data definition and control processes.

Referring to FIG. 2 the processing of a transaction is shown. Theprocess starts at 5. An Internet user 4 connects to the Internet at 6and accesses the transaction manager 2 via the Internet. A user profilepassword check is conducted for granting access to the transfer manager.The transfer manager also has network security access controls andcommunication is encrypted. The Internet user is required to register tohold an account with the transfer manager.

The Internet user requests 7 a transaction identifier for his or hershopping needs. That is the user may request a transaction identifier beprovided that will have a record of the limit the user allows to beauthorised. This amount must be less than the available credit, but alsoput an additional limitation on the transaction that can be conductedusing transaction identifier. This gives the user control over themaximum value of transaction that may be authorised. The transactionmanager checks 8 the Internet user to ensure that he or she is a validuser. The transaction manager confirms the validation process at 9.

If, as a result of this decision at 10, the user is not valid then theyare rejected from the transaction manager site. If the user is valid thetransaction manager issues at 11 a transaction identifier.

The Internet user is then able to select an item at e-commerce merchantssite at 12. Upon deciding to purchase the item the user provides thetransaction identifier to the e-commerce merchant at 13.

The e-commerce merchant forwards for validation the transactionidentifier to the transaction manager at 14. The transaction managerthen confirms the validity of the transaction identifier at 15. Asecurity process including a merchant profile password checking isconducted by the transaction manager before access is approved. Furthernetwork security access controls such as encryption are provided toprevent security problems.

If the transaction identifier is not valid at 16 the transactionrejected. If the identifier is rejected the e-commerce merchant isadvised along with the reason for the rejection. If the transactionidentifier is valid the transaction manager issues an approvedtransaction number at 17 to the e-commerce merchant and disables furtheruse of the transaction identifiers. The forwarding of the transactionnumber to the merchant confirms that the transaction identifier wasaccepted. At 18 the transaction manager issues a credit to thee-commerce merchant's account with the financial institution accordingto the value of the purchase. The transfer manager undergoes a passwordcheck before access to the financial institution is approved. Furthernetwork security access controls are also provided including encryptionof communication. The process then ends at 19.

In FIG. 3, the system architecture of the transaction manager is shown.An operating system 20 provides an underlayer of the transaction managersystem architecture. Sitting on top of the operating system is arelational database management system 21. This is the data collectioncentre of the system. The relational database management system 21interacts with an application system 22. The application system 22interacts with a Internet base system 23 that links the transactionmanager to the outside world.

Referring to FIG. 4, a database structure is shown relating an Internetuser's profile to a financial institution and an e-commerce merchant'sprofile to a financial institution profile.

An Internet user's profile 24 is a repository of information concerninga particular Internet user. This is used for validation with a financialinstitution profile 25. An e-commerce merchant profile 26 or arepository of information concerning particular e-commerce merchant.This is used for validation with financial institution profile 27.Profiles for Internet user's will be different to those of e-commercemerchant profiles.

Referring to FIG. 5, data validation structure and processes are shown.In relation to the Internet user's profile personal details are checkedwith the relational database management system for accuracy and ifaccepted account details are then checked with the relational databasemanagement system validity. If accepted, credit details are checked withthe relational database management system for validity and if acceptedtransaction details are stored. Audit trials of each check are alsorecorded.

In relation to the e-commerce merchant profile corporation details arechecked with the relational database management system for accuracy. Ifaccepted, account details are then checked with the relational databasemanagement system for validity. If accepted the credit details arechecked with the relational database management system for validity. Ifaccepted the transaction details are stored. An audit trail is recordedfor each check and changed to the profile.

The present invention provides the following functionality to supporte-commerce:

-   -   it provides a true online system, that is a process where all        transactions are online;    -   it provides a purchasing system where all users are able to make        purchases online;    -   it provides a payment system that supports other suppliers        (merchant and/or financial institution) payment system;    -   the system provides password control to validate processes        within the system;    -   it provides debit and credit card support enable usage of other        suppliers (merchant and/or financial institution credit        card/debit card as well as an alternative credit card/debit card        facility to make purchases and payments);    -   it provides support for all financial institution accounts        allowing a transaction to be processed by all types of bank        accounts (for example, savings and cheques). Internet users can        use all types of bank accounts to make online purchases and        payments provided they are valid users;    -   it provides a controlled purchase amount through usage of        transaction identifiers with all users able to control the        amount of funds for each transaction;    -   it provides a user validation system with the system validating        the users 5 identification;    -   it provides a merchant validation system with a system        validating the merchants identification;    -   it provides protection system through encryption and decryption        system and proprietary system architecture.

Modifications and variations may be made to the present inventionwithout departing from the basic inventive concepts. The nature of suchmodifications and variations are to be determined within the scope ofthe present invention as defined by the foregoing description andappended claims.

1. A computer-implemented method of conducting an online transaction,said method comprising: providing on a computer a transaction managerhaving a registration module for holding registration information of auser, and for holding registration information of a merchant; an input;a checking module; an identification generator; a validating module; atransaction number generator module; an output; and a payment module;registering a user with the transaction manager by storing registrationinformation of the user in the registration module; registering amerchant with the transaction manager by storing registrationinformation of the merchant in the registration module; receiving at theinput of the transaction manager a request by the user for a uniquetransaction identifier to cover a purchase; checking the validity of theuser using the checking module; outputting to the user a uniqueidentification of a transaction generated by the identificationgenerator from the output if the user is valid; the user sending from auser computer to a computer associated with the merchant a request for atransaction to purchase a product or service, the request comprising thetransaction identification and a user nominated account identifier;receiving at the input of the transaction manager the transactionidentification and the user nominated account identifier provided by themerchant computer; confirming payment of the transaction in respect of aregistered user's financial institution account identified by the usernominated account identifier comprising validating the receivedtransaction identification using the validating module, then outputtingfrom the output to the merchant a unique transaction number generated bythe transaction number generator module if the transactionidentification is valid; and causing an online payment to be made by anexternal financial institution deducting the payment from the user'sfinancial institution account identified by the account identifier anddepositing the payment into the merchant's financial institution accountusing the payment module when the received transaction identification isvalidated.
 2. A method of conducting an online transaction as claimed inclaim 1, wherein the transaction manager deducts money from a user'saccount to cover the money paid to the merchant.
 3. A method ofconducting an online transaction as claimed in claim 2, wherein thetransaction manager deducts money at the time of the request of theunique transaction identifier.
 4. A method of conducting an onlinetransaction as claimed in claim 2, wherein the transaction managerdeducts money at the time of the transfer of money to the merchant.
 5. Amethod of conducting an online transaction as claimed in claim 1,wherein the user's account is with a financial institution.
 6. A methodof conducting an online as claimed in claim 1, wherein the user'saccount is with the transaction-manager and the transaction manager isnot a financial institution.
 7. A method of conducting an onlinetransaction as claimed in claim 1, wherein the transaction managerissues a new account from an account issue module, where the new accountthat corresponds to an existing account with a financial institution,whereby the new account details are used by the user and merchant inplace of the existing account details.
 8. A method of conducting anonline transaction as claimed in claim 7, wherein the transactionmanager uses the new account details to look up the existing accountdetails in a database and the existing account details are used by thetransaction manager to conduct the financial institution to deduct moneyto cover the purchase from the user's existing account.
 9. A method ofconducting an online transaction as claimed in claim 1, wherein the userrequests the unique transaction identifier by an Internet connection.10. A method of conducting an online transaction as claimed in claim 1,wherein the user's registration details are stored in a database of thetransaction manager.
 11. A method of conducting an online transaction asclaimed in claim 10, wherein the merchant's registration details arestored in the database including a unique merchant identification.
 12. Amethod of conducting an online transaction as claimed in claim 10,wherein the user's request for the unique transaction identifier isvalidated by the checking module checking the user's details stored inthe database of the transaction manager.
 13. A method of conducting anonline as claimed in claim 11, wherein when the merchant forwards theunique identification number to the transaction manager, the merchant'sunique identifier is sent to the transaction manager, whereby validatingthe merchant's identification is checked by the validating module of thetransaction manager before sending the transaction number to themerchant.
 14. A method of conducting an online as claimed in claim 1,wherein the transaction manager checks if sufficient funds are availableto cover the transaction and the transaction number is only provided tothe merchant if sufficient funds are available.
 15. A method ofconducting an online transaction as claimed in claim 1, wherein themerchant links to the transaction manager by the Internet or a dedicatedsecure line to request the transaction number and the transfer of funds.16. A method of conducting an online transaction as claimed in claim 1,wherein the link between the user and the transaction manager andmerchant and transaction manager are secured by encryption performed byan encryptor module.
 17. A computer implemented transaction manager forconducting an online transaction, said transaction manager comprising: acomputer, wherein said computer is configured to executecomputer-executable code comprising: a registration module forregistering a user; a merchant registration module for registering amerchant; a user request input module for receiving a user request for aunique transaction identifier to cover a purchase; a checking module forchecking the validity of the user; an identification generator thatgenerates an unique transaction identification if the user is valid; atransaction identification generator that generates a unique transactionidentification; a transaction identification input module for receivingthe transaction identification and a user nominated account identifierafter they have been provided by the user to the merchant as part of arequest to purchase a product service; a validating module forconfirming the payment of the transaction in respect of a registereduser's financial institution account identified by the user nominatedaccount identifier comprising validating the received transactionidentification; a transaction number output module for providing themerchant with the unique transaction number only if the transactionidentification has been validated and is valid; and a payment module forcausing payment to be made by an external financial institutiondeducting the payment from the user's financial institution accountidentified by the nominated account identifier and depositing thepayment into the merchant's financial institution account when thereceived transaction identification is validated.
 18. The transactionmanager of claim 17, wherein the transaction manager further comprisesmodule for deducting money from a user's account to cover the money paidto the merchant.
 19. The transaction manager of claim 17, wherein thetransaction manager comprises module for issuing a new account thatcorresponds to an existing account with a financial institution, wherebythe new account details are used by the user and merchant in place ofthe existing account details.
 20. The transaction manager of claim 19,wherein the transaction manager is configured to use the new accountdetails to look up the existing account details and the existing accountdetails are used by the transaction manager with the financialinstitution.
 21. The transaction manager of claim 17, wherein the userrequest input module is configured to receive the request for the uniquetransaction identifier by an Internet connection.
 22. The transactionmanager of claim 17, wherein the registration module of the transactionmanager comprises a database storage for storing the user registrationdetails.
 23. The method of claim 22, wherein database storage is alsofor storing the merchant's registration details including a uniquemerchant identification.
 24. The transaction manager of claim 22,wherein transaction manager is configured to validate the user's requestfor the unique transaction identifier by checking the user's detailsstored in the database storage.
 25. The transaction manager of claim 17,wherein the transaction manager is configured to check if sufficientfunds are available to cover the transaction and the transaction numberis only provided to the merchant if sufficient funds are available. 26.The transaction manager according to claim 17, wherein transactionidentification output module is configured to provide the uniquetransaction identification to the user by a secure encrypted link. 27.The transaction manager of claim 17, wherein transaction identificationinput module is configured to receive the unique transactionidentification by a secure encrypted link.